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Plan year-end giving wisely
MISSISSIPPI STATE -- As the calendar winds down, many people start looking at their bank statements and assets to see what contributions they want to make before the year expires.
The holiday season is a time of thankfulness and generosity for most Mississippians, and numerous charities and organizations benefit from the flurry of giving this season inspires. Other donations are generated as tax payers look ahead to tax season and want to alter their tax burden.
Bobbie Shaffett, Extension associate professor of human sciences at Mississippi State University, encouraged well-intentioned donors to choose charitable causes carefully when making a donation.
"Never be afraid to ask for information in writing. This will give you time to think about your giving decision and to investigate further," Shaffett said. "Before giving, consider how your money will be used."
Shaffett suggested several questions to ask when considering an organization or cause to which to give a donation. Get a charity's full name and address and be aware of phony sound-alikes. Determine how much of the donation is tax deductible, and get a receipt for the gift.
Find out if the person making the solicitation works for a professional fund-raising firm, and ask how much of every dollar goes to the charity.
"According to Mississippi law, if asked, a professional charity telemarketer must immediately inform you of the percentage of money that actually goes to the charity," Shaffett said.
Mark Green, Mississippi spokesman for the Internal Revenue Service, said year-end is a popular time to give because of tax considerations and also because of the "out with the old, in with the new" mind set. He cautioned donors to confirm the organization's tax-exempt status.
"Some organizations will claim to have an exempt status and may have never applied for it or never been given the exempt status," Green said. "Unfortunately, scams grow each year. In this past year, we have seen individuals setting up corner booths and saying they are tax exempt."
Seek professional assistance from a tax preparer, attorney or certified public accountant when planning a large gift. Green said land and valuable items should be appraised before donation to determine the fair market value of the gift. For audit purposes, keep all donation receipts three years, or seven years if they are business-related.
"Keep your receipts for tithes and offerings to the church or contributions to such organizations as the United Way," Green said. "Many folks make charitable contributions but do not claim them on their tax returns."